It's sort of weird, because when you look at the entire story, it's difficult to believe that the market is so enthralled by the situation, but it is and shares of Activision Blizzard closed 10.65% higher today on huge volume. For one thing, two highly-expected titles, Singularity and StarCraft II, have been shifted to 2010. This is likely part of the reason for the cut in the full-year revenue outlook. But as Reuters mentions, the reduction is also driven by a feeling that the video-game industry may face general challenges in terms of consumer spending. The guidance for the next quarter is below expectations too.

However, I think the market is being realistic on a relative basis. Activision Blizzard is, quite simply, the strongest publisher out there with the strongest pipeline. There are choices out there for trading. You can take a chance on Electronic Arts (NASDAQ: ERTS), THQ (NASDAQ: THQI), or Take-Two Interactive (NASDAQ: TTWO), but Activision Blizzard is a stock you can either trade or invest in with confidence. The company's intellectual properties are just that good.

Still, if you were trading Activision Blizzard ahead of the earnings, you better seriously considered selling into today's strength. I would not take Wall Street's gift of a bid lightly. As for me, I'll be watching the price action over the next several sessions to see if I can enter on a pullback for a quick trade (I also own a long-term position in the company, but I am willing to trade the stock in a short-term account).

My sense is Activision Blizzard will be the kind of equity that institutions will want to buy on dips. This may present opportunities for the nimble market player.

Disclosure: I own Activision Blizzard; positions can change without notice.